Published in Economic Development

Muskegon approves $150K in emergency loans for Lakeside businesses

BY Thursday, March 26, 2020 05:00am

The Muskegon City Commission has approved $150,000 in emergency loans for businesses in the Lakeside Business District that have struggled from a troubled road construction project and forced closures due to the coronavirus.

During a virtual meeting on Tuesday, the commission unanimously approved allowing City Manager Frank Peterson to authorize the loans for up to $10,000 per business. The revolving loan program is available until May 30.


The city specifically targeted the Lakeside Business District along the south shore of Muskegon Lake as several businesses struggled from a lengthy road reconstruction project. A one-mile stretch of Lakeshore Drive did not reopen to two-way traffic until late October. The $6.5 million construction project began last April and was initially to be completed in July 2019.

“We were really worried that a lot of those businesses were having a very difficult time recovering from that,” Peterson said. “We make our money in the summertime here. Many of them were having a tough time making it through the winter.”

Lakeside is an established business district between downtown and Muskegon’s Pere Marquette Beach. Businesses along Lakeshore Drive dealt with construction crews, road closures and lost revenue during the street reconstruction project, and now many of them are temporarily closed down due to Gov. Gretchen Whitmer’s stay-at-home order that closed nonessential businesses.

Until Monday, the owners of Lakeside Emporium — an old-fashioned candy, soda and ice cream shop — were limiting five people in the store at a time and offering curbside service and deliveries. Gary and Laureen Samples opened the business in 2003. Gary Samples said 2019 was the worst year in a decade due to the road construction delay. They decided to close and lay off employees after the governor’s stay-at-home order despite an already rough year.

“It’s just like holy moly, what can be next,” Gary Samples said. “It’s really horrible for us because this is my wife and I’s livelihood. We don’t have a fallback position. It’s not a get-rich place. It’s what we like to do. It’s a really fun place to be.”

Samples heard about the city’s emergency loan program, but he is not sure he will take advantage of it. Right now, the Samples continue to answer the phone and are fulfilling orders via phone or email and shipping products via priority mail.

Attempts to reach two other longtime Lakeside businesses — Marine Tap Room, a popular bar across from Great Lakes Marina, and Art Cats Gallery, an eclectic gallery owned by vocal business district proponent Louise Hopson — were unsuccessful.

The road project involved a complete road reconstruction, water and sewer upgrades, and new streetscaping on Lakeshore Drive between McCracken Street and Laketon Avenue. The closures extended into late fall, diverted some beach traffic to Sherman Boulevard, and made it difficult for people to access many of the Lakeside businesses throughout the summer. The project still isn’t totally complete. Brickwork and final landscaping will continue this spring, Peterson said.

Some businesses are behind on rent or mortgage payments, while others aren’t sure they can recover. Peterson said this is the first time the city has offered direct assistance to help them.

“We have been in contact with a lot of them, and we have heard how difficult it was to make it to where they are now,” he said. “Some of the key ones are really contemplating whether to reopen. They are really having trouble in their minds on how to make it work.”

Peterson is still encouraging them to apply for state and federal grants and loans, but he said that could take several weeks to actually have money in hand. A loan from the city is the quickest route to provide some short-term operating revenue and cover fixed expenses.

“We are asking them to apply for those (state and federal) funds because we want to be the last resort, but they will get money from us before they will get money from those other two programs,” he said.

The commission’s vote allows city administrators to handle applications internally in an effort to speed up the approval process. The loan program isn’t new, and allows businesses to request up to $50,000, but loan requests normally go before the city commission.

The terms follow the normal revolving loan program interest rate criteria of prime plus 2 percent. All loans will be amortized over a 36-month period, with interest accruing after 90 days. Business owners will have a 120-day grace period to start repaying the loan.

“This is really to infuse them with some cash and get through the summer, so they can get up and running again,” Peterson said.

The Revolving Loan Fund has in excess of $1 million available to lend. If brought to full amortization, the loans should generate approximately $33,000 in interest for the fund. The city also hopes to recoup some money from penalties related to the road project’s delay. Peterson said there has been ongoing discussions with the contractor and the state regarding how many days the project was overdue.

The Revolving Loan Fund originated in part from funds Sappi Fine Paper North America gave to the city when it closed. Peterson said Sappi gave $500,000 to the city to help offset the loss of its business.

The emergency assistance program could be extended to other businesses in the city, depending on how long the governor’s stay-at-home order is in place. It is currently scheduled through April 13. Peterson said most of the businesses in the downtown area had a strong summer, fall and winter. Some of them do have more debt and higher rent, but city officials encouraged them to build up a nest egg to survive lean months.

“This year was a good example of what a year-round community can start to look like because it really didn’t slow down a lot downtown,” he said. “A lot of our businesses did a good job of staying active and engaged all winter long.”

The Revolving Loan Fund is typically used for small-business expansion, equipment and infrastructure improvements, not to help cover general operating expenses.

“This program wasn’t necessarily meant as a lifeline for businesses,” he said. “In this case, the businesses we are helping, two years ago, were very successful businesses.”


Elsewhere in the city, issues around COVID-19 have suspended work on the Muskegon Convention Center and other Department of Public Works projects until the governor’s order is lifted. The city also closed the Farmers Market’s indoor market, and Peterson doesn’t expect it to reopen until the regular market opens in early May. The city also manages the Western Market chalets, but they don’t open until Memorial Day weekend.

However, Pere Marquette Beach, city parks and boat launches remain open, and city officials have encouraged residents to get outside while practicing safe social distancing. Residents can visit the beach, walk or use the Lakeshore Trail bicycle path where it remains open. High water, and damage related to erosion, has closed a portion from Lakeside to downtown near the municipal marina. In addition, the city plans to reopen Beach Street and start construction on a roundabout at Beach Street and Lakeshore Drive in mid-April.  

Overall, Peterson is optimistic the city’s local businesses will recover if COVID-19 closures don’t last too long and residents continue to buy local.

“All of them have seen an impact in their revenue, but for the most part, the community is doing a good job of supporting them when they can,” he said. “We’re probably going to see some layoffs in the industrial sector, so we could maybe see a bigger impact as people have to take time off work.”

EDITOR’S NOTE: This story has been updated from its original version. 

Read 5693 times Last modified on Thursday, 26 March 2020 11:00